As Fidelity Investments found out, silos and the Web are hardly chocolate and peanut butter when it comes to how well they go together for users.

Steven Scullen, president and CEO of Fidelity's personal and workplace investing technology unit, says the firm learned the hard way that its siloed internal operations diminished users online experience. Because each business line and each channel was a completely separate operation, a customer with five Fidelity products, for example thought they had just one relationship, but Fidelity thought they had five.

Those customers with five different accounts began to ask: "Why do I have to change my address in five different systems? Why can't I do it once?" he said at a recent TowerGroup conference. "We actually made the customer the integrator of our services, which was not a great customer experience." By contrast, those same customers can go to Intuit Inc.'s Mint.com personal financial management Web site and use one system to interact with as many accounts as they want, even accounts at multiple financial companies, he says.

Fidelity's experience is a lesson in how mature the Web has become. Transacting online has become so common that people now have user experience expectations for banking sites, and are more intolerant of Web pages that don't measure up. It's a big shift from the early days of online banking, when people had few expectations about the then new channel, said Nicole Sturgill, a research director at TowerGroup. Sturgill says online banking was first deployed as people were learning how to use the Internet, and financial companies could deliver whatever services they thought would be useful. But that's no longer the case, as a public that's now fully Web literate across all demographics demands a high level of usability and utility, and sites that offer the same experience that's available with other industries.

Scullen said customers now have a much greater sense of what they want to see on his company's Web site. We "have to be careful we don't apply the old rules to the new way of doing business," he said.

For example, forget about the idea that the Web channel appeals primarily to an audience much younger than those who care about investments. Scullen said this is not necessarily true; Fidelity's customers tend to skew older, but they are still comfortable with social media and other Internet applications typically associated with young people.

"Don't confuse the latest technology with the younger generation," he said. "Seventy-one percent of people who use our site go to Facebook."

Usability also applies to mobile apps. When Fidelity developed a mobile phone service, Scullen said the company did not attempt to adapt its online interface to a smaller screen. Instead, it took its cues from other popular mobile applications, and tried to design a system that played to how people are already using their phones. "We now take more trades through handheld devices than we do through the phone," Scullen said. Fidelity introduced an app for Apple Inc.'s iPhone in the first quarter of this year, and upgraded its existing mobile service to take advantage of the touchscreen capabilities of smart phones.

Sturgill said some banks are trying to replicate the online experience in their branches. One bank, which she did not name, "made their teller screens the same as their online banking screens ... they looked exactly the same," she said, though these screens included just a bit more information for the teller's benefit.

By duplicating its online banking interface at the teller's desk, the bank made it easier for the teller to communicate with customers. When the teller needed to explain something, "they could actually turn their screen around" and explain things in the same interface that the customer would use at home, Sturgill said.

The popularity of social media also cannot be ignored.

"Social networks really do drive purchasing decisions," says Rodney Nelsestuen, a senior research director at TowerGroup. "The social network is going to stay. It's not going away."

The information customers share online could help banks spot significant life events, though Nelsestuen stressed that banks could also gather this information in their existing channels if they are equipped to spot it and follow up on it.

He shared an example of a couple in a focus group he observed who called their bank after a purchase they made during a visit to Florida was flagged as potentially fraudulent. The couple told the bank they had recently bought a condo in Florida and planned to live there part of the year. The bank rep simply noted this and approved the transaction.

"If you were that bank, what would you do with that information?" Nelsestuen said. The bank could have helped them refinance their mortgage or sign up for online banking to keep that relationship when the couple moved south. Or, realizing that this couple was probably going through a midlife crisis, the bank could have asked: "Do we need to finance a convertible for them?"

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